Case study

An institutional investor wished to expand its exposure to private equity and wanted to see its strategy quantified and fine-tuned.

Challenge

The management needed the strategy quantified, tested and stress-tested in order to get the approval of the board of directors.

Our intervention

LDS Partners modelled the strategy and reported on the distribution of expected final returns (IRR and TVPI), liquidity profile, optimal diversification of the portfolio (size of investee funds, geographies, sectors…). Furthermore, different scenarios were stress-tested, capturing the likelihood of our client to meet its overall objectives.

Case study

Stay long on a portfolio of interests in funds or sell?

Background

A European LP considered the sale of a portfolio of interests in private equity funds.

Challenge

The front office wanted to have an independent opinion on pricing based on the final expected return of the portfolio. They needed a robust quantitative analysis before going ahead with the transaction, and for the upcoming negotiations with potential buyers.

Our intervention

LDS Partners modelled the portfolio to report on the final expected returns (IRR and TVPI), on the liquidity profile and on the statistical distribution of the current Net Present Value of the holdings. Through stress testing, the strong and weaker fund positions were highlighted with a quantification of their impact on the transaction price. The final report provided our client with a solid basis to decide on the transaction itself and to set the boundaries of their negotiation interval.